Wednesday, August 18, 2010

How to calculate market value of a company?

How do I calculate the market value of a company? I have their SEC filings to work with plus any information available freely on the Internet.





Is it just shares issued and outstanding times price per share? What do you do about Treasury Stock? Does that get subtracted from the total number of shares outstanding? And what about debt? Does that get included?How to calculate market value of a company?
There are many or at least several ways but one of the most popular is a multiple of earnings per share based on there history of earnings as a percentage of there market price (i.e. earnings are historically about 3% 0f there share market price or If the earnings are $3.00 per year the market price would be maybe 15 times 3 0r $45.00 per share. Some use 10 or 15 or something in between based on projected earnings.How to calculate market value of a company?
This is the total number of shares issued by the company multiplied by the market price.

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